A recent report by consulting firm Ernst and Young (EY) emphasizes the pivotal role of generative AI (GenAI) in propelling India's digital expansion. Recognizing the global surge in GenAI adoption for its positive impact on enterprise efficiency, the report explores its potential to accelerate India's growth trajectory.
Key Insights:
The study underlines the recognition from esteemed institutions like the World Bank and the IMF, acknowledging India's position as one of the world's fastest-growing economies. Projections indicate a substantial boost in GDP, ranging from US$1.2tn to US$1.5tn within seven years, constituting an additional 0.9% to 1.1% in annual Compound Annual Growth Rate (CAGR).
GenAI's Contribution to India's Economy:
EY points out that GenAI could be the linchpin for India's economy, poised to become the third-largest globally by 2027. The report suggests that GenAI adoption could contribute an impressive US$359bn to US$438bn to India's GDP in 2029-30, representing an additional 5.9% to 7.2% of GDP over seven years (2023-24 to 2029-30).
To fully capitalize on this potential, EY stresses the need for increased investment in GenAI education and upskilling. This strategic move is deemed essential for India to achieve its ambitious digital goals and further accelerate its economic growth.
Sectoral Impact:
The report predicts varying impacts across sectors, highlighting that business services, finance, transportation, education, retail, and healthcare are well-positioned to reap the benefits of GenAI due to their advanced digitalization.
Regulatory Measures:
EY advocates for a proactive regulatory stance to ensure citizen safety while realizing the full potential of GenAI. The report recommends government interventions such as facilitating access to critical digital infrastructure, including the rollout of 5G, data center development, and policies that attract specialized talent.
Upskilling Imperative:
Acknowledging a significant skills gap in the technology sector, particularly in areas like cybersecurity, EY emphasizes the importance of education and upskilling. The report suggests that upskilling initiatives will enable India to fully leverage its demographic dividend and ensure consistent and secure usage of AI.
Insights from EY India Technology Consulting Leader:
Mahesh Makhija, EY India Technology Consulting Leader, highlighted the report's significance on LinkedIn. He described it as a "snapshot of India’s readiness for GenAI adoption," offering valuable insights into the nation's economic future driven by the revolutionary force of generative AI.
